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Delhi District Court

Bank Of Baroda vs Punjab National Bank on 4 January, 2019

IN THE COURT OF MS. TWINKLE WADHWA: LD. ADDITIONAL
  DISTRICT JUDGE­03:PATIALA HOUSE COURT:NEW DELHI
                      DISTRICT

CS No.56524/16

      Bank of Baroda
      (A Govt. of India Undertaking)
      Navyug Market, Ghaziabad, UP.
      Through its Indraprastha Regional Office
      6th Floor, Bank of Baroda Building
      Parliament Street, New Delhi­110001.
      Through its Constituted attorney.
                                                    .....Plaintiff

      VERSUS

1.    Punjab National Bank
      N 46, Connaught Circus,
      New Delhi­110001.

2.    Ajay Gupta
      KC­20, Kavi Nagar,
      Ghaziabad.
                                                    ....Defendants

Date of Institution         :     30.08.2012
Date of Final Arguments     :     10.12.2018
Date of Decision            :     04.01.2019

                           JUDGMENT

The Case­

1. The present is a suit filed by plaintiff against defendant No.1 CS No. 56524/16 Page 1 of 9 Bank and its client defendant no.2 on the ground that defendant no.1 did not comply with KYC norms and other procedure while opening account of defendant no.2 which resulted in clearance of a forged cheque presented by defendant no.2 to defendant no.1 Bank.

Plaintiff's Case­

2. Plaintiff is a Nationalised Bank having branches all over India. M/s. Milestone Corporation is one of the client of plantiff having current account with their Ghaziabad Branch. On 08.07.2009 M/s. Milestone Corporation made a complaint to the plaintiff that two forged and fabricated cheques bearing no.16285 and 16288, both of Rs. 5 lacs each, have been debited from its account on 27.06.2009 and 26.06.2009 while the original cheques are lying with them. Hence, such cheques were not issued by M/s. Milestone Corporation. Also one Police complaint was lodged by M/s. Milestone Corporation. On enquiry it came to the knowledge of plaintiff that defendant no.2 presented those forged cheques in its account maintained with defendant no.1. Immediately after the amount was credited into the account, the amount was withdrawn leaving negligible amount in the Bank account of defendant no.2. It came to the knowledge of plaintiff that defendant no.1 opened account of defendant no.2 without complying with the KYC norms. As a result when plaintiff Bank tried to locate the whereabouts of CS No. 56524/16 Page 2 of 9 defendant no.2, it was unable to do so as address was incorrect. Further defendant no.1 was negligent in allowing such high transactions immediately in a new account.

3. Further plaintiff Bank has already reimbursed its client M/s. Milestone Corporation towards loss towards one of the cheques i.e. cheque no. 16285 for Rs.5 lacs. Proof regarding the same is filed on record. Consequently, the legal notice was issued and the present suit was filed. Further complaint is also made to RBI by plaintiff. Further plaintiff lodged an insurance claim with National Insurance Company which was dismissed on the ground that it is based on forgery. It is the case of plaintiff that defendant no.2 in collusion with officers of defendant no.1 managed to open the savings bank account for the purpose of this forgery. Case of defendants No.2­

4. Defendant no.2 was proceeded ex­parte vide order dated 11.03.2013.

Case of defendant No.1/Bank­

5. It is the case of Bank that present plaintiff has no cause of action against the present answering Bank as the present matter pertains to forgery and cheating. It is the case of defendant no.1 that the image of said cheque was sent to plaintiff Bank and it is plaintiff Bank which cleared the said cheque. It is denied that defendant no.1 opened account of defendant No.2 without CS No. 56524/16 Page 3 of 9 complying with KYC norms. Further the said cheque was passed by the service branch of plaintiff Bank at Sansad Marg. Hence, it is the said branch of plaintiff which is liable. It is denied that there is any liability of defendant no.1. Further in the criminal complaint, defendant no.1 Bank is not a party. Further it is not pointed out by plaintiff that which official of defendant no.1 is liable for the said fraud, if any, or negligence, if any.

6. On completion of the pleadings, following issues were framed on 17.05.2013­ ISSUES­

1. Whether plaintiff is entitled to a decree for recovery of money? If so, how much and from whom?

2. Whether this Court has territorial jurisdiction to try and entertain the present suit?

3. Relief.

7. To prove its case, Plaintiff examined Shri Kailash Praksh Sharma as PW1 and exhibited the following documents­ S.No. No. of Exhibits Details of the documents 1 Ex. PW1/1(OSR) Power of Attorney 2 Ex.PW1/1(colly) Original E stamp attached to POA 3 Ex.PW1/2 Copy of Letter dated 16.07.2009 Ex.PW1/3 Office Copy of reply dated 23.07.2009 to legal 4 notice CS No. 56524/16 Page 4 of 9 5 Ex.PW1/4 Copy of Letter dated 18.08.2009 6 Ex.PW1/5 Letter dated 24.08.2009 7 Ex.PW1/6 Statement of account

8. On the contrary, defendants examined Shri Sachin Katiyar as DW1 and exhibited the following documents­ S.No. No. of Exhibits Details of the documents 1 Ex. DW1/A Copy of cheque in question Ex.DW1/B Copy of statement of account pertaining to 2 defendant no.2 3 Ex.DW1/C Power of Attorney duly attested Reasons for Decision­

9. Heard both the sides and gone through the record.

10. It is the specific case of plaintiff that defendant no.1 has opened Bank account of defendant no.2 without compliance with KYC norms i.e. relevant documents thereby showing identity of the person, residential address etc. Along with written statement, defendant no.1 did not file the account opening form of defendant no.2 nor any other documents pertaining to defendant no.2. Hence, it is a case of bare denial on behalf of defendant no.1. Though during trial application of plaintiff was allowed and he was permitted to summon the necessary documents from defendant no.1 but thereafter right to lead evidence of plaintiff was closed.

Hence, those documents could not be summoned by plaintiff. However, it is noted that it was not for the plaintiff to summon those documents but it was the responsibility of defendant no.1 to produce the account opening form along with necessary documents on record to prove that it had complied with KYC norms. It is admitted by defendant no.1 in cross­examination that he has not filed the relevant documents on record nor he could state what those documents were.

11. Further it was specifically put to defendant no.1 in cross­ examination that they had not truncated the cheque which was denied. It is the specific case of plaintiff that if they have truncated the cheque, they could have easily find out that it was a forged cheque and for this reason, defendant no.1 has not placed even original cheque on record. Needless to say, it was the responsibility of defendant no.1 to place original cheque on record if they wanted Court to presume that it was not a fault on their part.

12. A party who asserts a fact must prove the same and and a party who is in possession of relevant documents, must produce the relevant documents on record. If a party does not produce the relevant document, the presumption is against the party that if it will be produced, it will be against the interest of the said party.

13. The case of defendant no.1 is based on mere denial. They have not produced fake cheque on record nor they have filed the CS No. 56524/16 Page 6 of 9 account opening form along with necessary documents. The relevant extract from the cross­examination of DW1 is as follows­ "Ques:­ What the documents defendant no.1 obtained for opening of account of defendant no.2? Ans: As per bank norms.

Ques: Can you specify these documents?

Ans: No. It is correct that there are no KYC documents pertaining to defendant no.2 on the record. KYC documents are verified by concerned official of the branch. I do not remember in the instant case of opening of account of defendant no.2, as to who has verified KYC documents. It is wrong to suggest that defendant no.1 bank has opened bank account of defendant no.2 on the basis of fake KYC documents and that is why the same are not placed on record. It is wrong to suggest that KYC documents of defendant no.2 are not duly verified.

Mark PW1/A is a copy of the cheque drawn on plaintiff bank which is deposited by defendant no.2 with defendant no.1 bank in his savings bank account. The said cheque is deposited by defendant no.2 vide pay­in­slip date 25.06.2009 (Ex.DW1/A). It is correct that the original cheque copy of which is Mark PW1/A is with the defendant no.1 bank.

It is correct that the said original cheque is not filed by defendant no.1 bank. It is wrong to suggest that the same cheque is not filed since the same is fake and concerned officer of defendant no.1 bank has wrongly processed the same. It is correct that when any cheque is presented to a bank, the same is checked under U V Light and is then truncated as per RBO guidelines. It is wrong to suggest that RBI guidelines on truncation were not followed by CS No. 56524/16 Page 7 of 9 defendant no.1. I cannot say whether any irregularity or anomaly was pointed out at the point of truncation by the concerned officer of defendant no.1 as I was not posted at that point of time in the branch".

14. In view of above, if the Bank defendant no.1 had complied with KYC norms and would have produced the relevant documents on record, then it could have been said that there is no liability on the part of defendant no.1. However, non production of the relevant documents shows that defendant no.1 Bank was negligent in opening the Bank account of defendant no.2 with them, without complying of KYC norms.

15. It is the argument of counsel for defendant no.1 that it is not pointed out by Ld. Counsel for plaintiff that which official of defendant no.1 was involved in the said conspiracy, if any. However, it is not necessary for plaintiff to prove which official of defendant no.1 is liable as the liability is of defendant no.1 Bank and it is for the defendant no.1 Bank to take necessary action against its officials, if any. Needless to say, the plaintiff has been able to prove that defendant no.1 was negligent in complying with KYC norms which resulted in said loss and encashment of cheques.

16. Defendant no.2 did not join the proceedings and hence defendant no.2 is also liable to make good the loss to the plaintiff.

17. On the basis of above, it is held that plaintiff is entitled to an CS No. 56524/16 Page 8 of 9 amount of Rs.5 lacs jointly as well as severally from both defendant nos. 1 and 2 along with interest @ 8% from the date of filing of the present suit till the actual realisation. Issue No.2­Whether this Court has territorial jurisdiction to try and entertain the present suit?

18. It is the own case of defendant that the clearance in the present case was given by the Sansad Marg branch of plaintiff. Hence, the present Court has jurisdiction. Issue No.3­Relief­

19. In view of above, the suit of the plaintiff is decreed. Plaintiff is entitled to an amount of Rs. 5 lacs jointly as well as severally from both defendant nos. 1 and 2 along with interest @ 8% per annum from the date of filing of the suit till the date of actual realisation.

Decree Sheet be prepared accordingly.

File be consigned to record room.

Announced in an open Court                       TWINKLE      WADHWA
                                                 WADHWA       Date:
On 4th day of January, 2019.                                  2019.01.04
                                                              12:01:01 +0530
                                                 (Twinkle Wadhwa)
                                            ADJ­03/PHC/NEW DELHI
                                                   04.01.2019




CS No. 56524/16                                            Page 9 of 9